I’m going to analyse some examples of international branding using Oosthuizen’s “ The Core Value Model”.

An example of successful international branding is McDonald’s and its “ Golden Arches”; one immediately pictures fast food and American culture.According to the psychologist Louis Cheskin, the round M represents a mother’s breasts.

Breasts can be seen as a symbol of nourishment that connect the individual with his mother at an unconscious level. According to Oosthuizen’s Core Value Model, core values are composed by universal symbols that can be understood by everyone.

Those symbols represent innate values and one of them is the procreation factor. Virtually anywhere in the world an individual regardless of language, sex, age, culture, will be able to identify the female breasts as a source of food, universal belonging and family.

When it comes to the other levels of communication presented by Oosthuizen, McDonald’s demonstrates efficient marketing since it localizes its strategies respecting and answering to religious demands such as the vegetarian burgers in India, the non pork menu in the Middle East and offering espresso coffee in Argentina and Portugal.

McDonald’s, built up a global message and it is being localizing it throughout the years.

Heineken is an example of international branding that failed one of its projects, due to lack of attention to learned values. Heineken’s logos carry universal symbols such as the star and the smile in its 3 Es and those can communicate globally.

However, according to Williamson ( 2013) it failed when trying to launch a featured bottle with the world cup finalists. Heineken designed featured bottles of beer containing the flags of the countries that were in the world cup . Saudi Arabia was featured and the country’s flag contains a verse from the Koran.

After the bottles were released, not only Saudi Arabia but all the Arab world were outraged because their religious verse was linked to alcohol. Long story short, Heineken had to recall all the bottles and create a new design.

Although Heineken was not trying to market alcohol to the Arab countries it created social commotion by not paying attention on local religious values.

In conclusion, it is fundamental to align universal elements that can effectively communicate a company’s brand and local adaptation of services and products.

The business patterns and consumer awareness are certainly in a changing process.

More attention is being paid on social and ethical aspects of a company and the kind of impact it is causing on society. MacKey & Sisodia (2013, pp. 59)

In addition to cultural challenges, strong international branding is also linked to real positive social impacts. Consumers don’t want to support companies that are not social friendly through the purchase of products.

Moreover, besides buying great products and services from brands they smartly choose, they also want to identify themselves with a bigger purpose. Mankind carry this inherent need of feeling helpful and that must be developed both at personal and group levels functioning as motivational factor.

Businesses could work with this subtle variable not only in the marketing field but in each sector of the company such as hiring, retention and HR functions. Thus, providing its customers and employees with the experiences they desire; not only buying experience but also social experience. Who has never dreamed of being a superhero?

Mackey & Sisodia (2013, pp. 65) highlight the importance of the private sector for society and how significant are the private sector’s contributions to minimize or even solve social problems.

It is quite interesting because while corporate social responsibility is basically a set of good actions that the company would practice, totally separated from the purpose of the company; corporate citizenship is the real perception that members of society have of an enterprise’s positive contribution to society.

I strongly believe that for the majority of businesses, corporate social responsibility is been a marketing strategy based on superficial actions that at the end of the day is inversely proportional to the damage caused by the companies ( environment, sweatshops, consumerism).

On the other hand, corporate citizenship takes into consideration the strategic interaction with consumers, employees, government, environment, suppliers and the community in which the organization is inserted. Corporate citizens master their abilities to solve global social challenges while building up credibility and consequently attracting consumers who will choose them over other competitors.

An interesting example is the company Windhorse. It was founded in 2007 and sells drinkable water to poor communities in India; people who live with $2.00 a day. The company proves that it is possible to work in new markets with consumers who live with $2.00 a day, help the communities to get rid of illnesses due to contaminated drinking water, do it at scale and be profitable. What the Indian government did not do, it is been done by the private sector.

Ralston (2008, pp.28,29) defines convergence and divergence as opposites tendencies when it comes to values formation and evolution. I do not believe those theories would be as efficient as the crossvergence theory in explaining complex relationships between headquarters and subsidiaries. Convergence and divergence assume extreme positions, in which a given society would or would not be influenced by factors such as technology and that technology itself would reshape values. Let’s compare Ralston’s convergence theory with economics convergence theory or The Catch Up Effect. The catch up growth consists of poor economies growing faster than rich economies and eventually converging with regards to per capita income. However, not every poor country would benefit from it. In order to achieve an income convergence a given country should have the abilities of absorbing new technology, attracting foreign direct investment and participating in global markets. Thus, I strongly believe that more complex variables shape and reshape values; technology might be one factor influencing people and consequently relationships, but surely not the only one. Abramovitiz & David (1994,pp.4)

With regards to crossvergence theory, it considers several important macro and micro predictors of values development. In other words, socio cultural aspects and business ideology would play significant role when it comes to values formation and evolution. Ralston (2008, pp. 35).

The author’s framework is based on many aspects of Hofstede’s cultural analysis model such as individualism versus collectivism dimensions. It is of fundamental importance the analysis of national culture in order to bring about more effective and efficient integration between headquarters and subsidiaries. However, the industry standards, business environment situation and organizational culture must also be carefully taken into account in order not only to have a successful integration process but also minimize risks.

I would consider applying Hofstede’s cultural analysis framework and Oosthuizen’s “The Core Value” framework during headquarter and subsidiary integration process. I find Oosthuizen’s Framework very helpful when it comes to core values and learned values observations and comparisons. For instance, a manager could use those two dimensions in order to identify and compare his/her core and learned values with the core and learned values of the members of the subsidiary where he is conducting business.

According to Oosthuizen (2004, pp.68) core values are universal. Therefore, exercising core and learned values self-awareness could help managers to align more efficiently organizational and individual’s goals. In addition, when marketing a product, Oosthuizen’s Core Value Model helps to effectively establish local and global presence through the incorporation of local and universal symbols, generating multicultural communication empathy. Hofstede’s framework provides important parameters of analysis that can be converted into strategic information inside an organization, facilitating the relationship between headquarters and subsidiaries.

Each aspect of social capital is supposed to generate some sort of economic benefit for a given company. For instance, the institutional capital has to do with formal and informal constraints (rules, laws, constitutions, norms of behavior and conventions) while relational capital has to do with human interaction (trust, norms and networks).

When it comes to moral capital, it is classified as the benefits that come from moral norms and behaviors ( sense of justice, beneficence and temperance).

It is also the relationship between micro and macro economic growth and moral values. Companies that impact positively of society are also highly profitable. MacKey & Sisodia

Finally the spiritual capital has to do with motivation, purpose and meaningful actions influencing human behavior.

Spiritual comes from the Latin word spiritus which means ” That which gives vitality or life to a system” . Thus, it is concerned with human life purpose and how it can be infused with meaning.

The four social capital aspects do collectively influence human resources management practices since they are all interconnected.

This viewpoint is based on the practice of conscious capitalism in which a company should have an inspiring vision and be driven by a higher purpose than just profits.

In that way, employees are motivated to work, because they feel helpful. Their lives also have a higher purpose since they are contributing to a better society in a major or minor scale through the company. The company itself should act as a vehicle impacting positively on the community, creating value to all its stakeholders.

References:

Heslam, P. Jones, I. Pollitt. M. (2009) ‘How a social capital approach can help multinationals show ethical leadership’ Centre for Business Research University of Cambridge [Online] Available at: http://www.cbr.cam.ac.uk/pdf/WP388.pdf ( Accessed: August 12 2013)

Culture is an important variable to be analyzed in the international business field and it can affect a company in several ways such as strategy definition, organization design, foreign investment decisions, human resources management, marketing management, supply chain, accounting, taxation and many other areas. However, according to Shenkar and Luo (2008, pp. 157), culture isn’t able to provide explanation for every phenomenon since non-cultural environmental variables can also greatly influence individuals and groups.

Therefore, the definition of culture and its measurability; the influence of cultural exchange; the existence of complex cultural interactions in the business scenario; are some of the motives in which comparative analysis of culture for management purposes is been sharply questioned. Yet, Mead and Andrews (2009, pp.57) further clarify that comparative methods of cultural analysis generate controversies since their reference frame is not definite and the weight attributed to cultural values differ significantly across borders.

Culture has paradoxical aspects. On one hand it can take centuries to change, but on the other hand it can change within decades. Hamamura (2009, pp.4)

Many cultural changes have been happening; for instance, the role of women in the US, raise of individualism in Japan and the consequences of globalization such as the influence of American brands in countries like Brazil and India. It is interesting to observe English words being incorporated into Brazilian Portuguese. Another interesting example is the Matsushita’s changing employment policies. The traditional Japanese company, known for having a ‘lifetime employment policy’ had to change its policy due to decreasing revenues, losses and slowdown in the global economy. The lifetime employment policy is known to be part of the Japanese style system and due to internal and external variables it had to be changed inside Matsushita company. Gupta and Sirisha (2003)

IBM Australia is an example on how managers should understand and forecast changes regarding values and cultural norms. Lee (2011) states that IBM frequently applies an opinion survey in order to embody business interpretation of cultural diversity. Education and awareness of different cultures is one of IBM focus, since it provides training and workshops through its own professional development of business culture studies. It consists of intranet based material on how to successfully conduct business with foreign partners.

It can be concluded that managers need a flexible approach when analyzing cultural aspects, understanding that each individual has unique features, respecting and learning from them. Moreover globalization has undermined the premises of the comparative analysis of culture because management practices involve different values not just culture. Lee (2011)

Hanamura, T. (2009) ‘ Are cultures becoming individualistic? A cross temporal comparison of individualism-collectivism in the United States and Japan’ Personality and Social Psychology Review 16 (1) 4-24

“Generally, MNEs that use cost-leadership strategies will choose the location that minimizes total cost. Labor costs differentials, transportation costs, and tariff and non-tariffs barriers, as well as governmental policies are important determinants of location choice.” Shenkar and Luo (2008, pp.63)

It is evident the FDI growth from developing countries over the past three decades. While in the past the flow of FDI from developed countries was predominant; nowadays, due to FDI policies liberalization, global competition and technological and logistical advancements, FDI from both developed and developing nations tend to happen.

New kinds of MNEs are emerging in which FDI is not just about the exploitation of resources but also and most importantly the exploration of new standards of organizational innovation.

The company used as an example is Petrobras, a Brazilian petrochemical that went from a state controlled enterprise to a competitive MNE after Brazil went through an ambitious process of SOEs privatization and market liberalization in 1997.

According to Goldstein, (2010, pp. 101) the process of market liberalization was concluded in 2002 through the abolishment of price control and monopoly on oil products importation.

I strongly believe that this economic policy making contributed to the growth of Brazilian economy since it reduced the country’s investment risk for foreign companies.

The company operates independently from government and raises private financing through project finance what generates more reliability inside Brazil and overseas. The company has expanding its operations in the last decades successfully due to heavy technological investments and development of extraction techniques in deep and ultra-deep water environments, heavy oil production and High Pressure High Temperature reservoirs.

Goldstein, (2010, pp. 103) highlights that through its R&D institute, Petrobras accomplished many records and got 2 OTC awards: “excellence in deep water operations”. Their R&D investments are comparable to Shell and BP, US and EU IOCs.

Petrobras internationalization process started in 1972 and its main purpose at that time was to guarantee supply security. Nowadays, the company possesses more than 100 production licenses in 27 different countries. It also raised its overseas refining capacity from 0 to 126.2 thousand barrels per day.

According to its 2009-13 strategic plans, Petrobras intend to invest US$ 15.9 billion in exploration and product increasing also the international bio-fuels production – bio diesel and ethanol. According to UNCTAD index of foreign dimension of MNC activities, Petrobras increased from 7 to 16. Without a doubt, internationalization generated many advantages to Petrobras such as diversification of risks and lowering of financing costs.
It also resulted in more managerial autonomy and technical improvement.

In terms of macroeconomics, Petrobras developed such efficient ways of producing fuel that energy security is a less important motivation, differently from non-OPEC NOCs such as India and China. That was shown in 2006, when Brazil announced that it was self-sufficient in oil supply.

As every company that grows, Petrobras also faces production bottleneck issues. The author clarifies that the company doesn’t have much idle refining capacity left. It was refining 1.7 million barrels of its 2 million barrels per day capacity. In addition, after the market liberalization, Petrobras management has faced fiercer competition. In order to solve the refining capacity issue, the company started a joint venture with CubaPetroleo yet, Petrobras would have problems processing the refined oil in Brazil. Petrobras’s success key is clearly based on technological investment.

The company started extracting from Brazilian deep waters in 1972 and expanded to other countries with similar exploration conditions. Talking about the organizational structure and process, the shift from state controlled to MNE made possible the construction of an innovative environment. Another interesting but controversial point are government policies. In order to contour some problems, Petrobras had the ability to use Brazil’s developing country status properly.

However, political friendship is not always the solution for interventionist policies, for instance, when the President Morales decided to nationalize Bolivia’s gas reserve, Petrobras was not spared.

Sharing knowledge efficiency in MNCs can be attributed to factors such as high or low context cultures, but also it can be attributed to the perception of risk or power. Therefore, according to Kaps (2011) trust is a key factor when it comes to sharing knowledge. The author also highlights the importance of culture analysis and how it influences people, systems, processes and consequently knowledge management.

The influence of culture on people has to do with the ability of accepting new technologies (systems), following processes strictly ( processes) and being culturally aware of differences (culture). High and low context culture have a tremendous influence on how people share knowledge and if the other parties are going to efficiently understand that kind of communication.

For instance, in high context cultures, the use of metaphors to explain or transmit knowledge is very common, while in low context cultures, charts and figures will serve as means of explanation.

Identifying those differences is extremely important in order to have a balanced and understandable communication style inside the organization.

Besides that, one must see knowledge management in a holistic way, interconnecting culture, systems, people and processes. The challenges posed by culture when it comes to sharing knowledge can be mitigated through constant development of trust.

Transforming passive knowledge in active sharing knowledge can be achieved through trust within the company and an attractive reward system.

Brazil has been cited as an attractive country to FDI among countries such as China, India, Russia and South Africa. That’s been happening due to a persistent development of economic stability policies, increased privatization process and creation of incentives in order to attract foreign investors. Nonetheless, it is still extremely bureaucratic to start a company in Brazil; consequently, the longer it takes to make things legal, the more expensive will be the final process.

The final cost to start up a company in Brazil is three times higher than in other BRICS countries. Besides that, other factors such as corruption, costly taxes and labor scenario and high interest rates make Brazil a difficult place of doing business.

Although the middle class increased considerably, the social discrepancy is still very high and the concentration of power aligned with corruption result in companies getting stuck in the process of being established in the country.

Cultural and market knowledge are fundamental but not enough in order to a company obtain timely success when corruption and bureaucracy are hand to hand